Russia » Economics
Author`s name James Platt

Russian workers threatening to close down Ford factory

At the Ford assembly factory in Vsevolzhsk a sit-down strike began on Monday – the workers refuse to carry out their overtime work, which will lead to a decrease in production of a quarter. The trade union representing the workers is demanding a 30% increase in working pay from the company and is threatening to completely stop production at the factory. Experts think, however, that this is unlikely a cause a decrease in the supply of Ford cars in Russia.

In the mean time the factory trade union not only has no intention of agreeing to the leadership’s terms, but is threatening their employer with even tougher sanctions, reports Kommersant. “We are not happy with the management’s proposals for the pay increase,” stresses Mr. Etmanov. “Most likely, the sit-down strike will continue until the end of this week, during which time the trade union will examine the possibility of launching an ongoing strike. The workers support this idea.”

We recall that the conflict between the workers’ trade union and the management of the Ford factory in Vsevolzhsk began back in autumn 2005. At that time the trade union demanded an increase in workers’ pay of 30%, a leveling-out of salaries for workers with differing qualifications carrying out the same job, and also permission for the trade union to allocate money from the social insurance fund. The company’s management made gradual concessions.

Firstly the trade union was granted access to the distribution of the social insurance fund, and in December the management established a new system for calculating salaries and bonuses, which took into consideration the trade union’s desire for equal pay for the same work. Only the question of an increase in salaries remained unresolved. It was discussed throughout the whole of February, but this demand was not realized. At the end of February the workers walked out of talks and again began to threaten a strike, reports newspaper Vedomosti.

On Monday the chairman of the factory trade union committee Aleksey Etmanov announced that at midnight the workers had begun a sit-down strike. According to Etmanov, the daily production of cars, amounting to 250-270, will be cut by a quarter. The strike will last a week, but as Etmanov says, “Then let’s see how the administration will react”.

The Russian subdivision of Ford maintains that the factory administration received no official notification from the trade union that a sit-down strike, or strike of any sort, would be carried out, even though the administration had offered workers a salary increase of 12.5% plus bonuses, which would provide for an annual sum of up to 8% of the annual salary depending on fulfillment of the factory plan. The management is waiting for an official reply from the trade union.

Experts consider that, despite the significant decrease in production during the current strike, it will have no effect on the Ford company’s sales in Russia. Firstly, the factory will be able to meet its performance targets at a later date, and secondly, dealers will make up for the smaller amount of manufactured cars by importing Ford Focuses from Europe – this year Ford has promised to deliver 2 thousand Focuses assembled in Europe to Russia, some of which have already arrived.

Moreover, some purchasers will be satisfied with Fiesta and Fusion models. From the start of the year demand for these cars has risen twofold. People have joined the waiting list for Ford Focuses several months in advance. Russian dealers have already received orders for more than 28 thousand cars of this model.

Some market participants are hoping that the long waiting lists for Fords will mean that a proportion of potential clients will decide to purchase models of the same class but of different brands, such as the Mitsubishi Lancer.

Translated by James Platt

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